Barefoot Investor Scott Pape on AI chatbots, credit repair companies and paying down personal loans

The Barefoot Investor has advice for a reader weighed down by debt and another with a bad credit file – and wonders if his job is at risk of being taken by AI.

Scott Pape vs. AI.

This might be the dumbest thing I’ve ever done.

Microsoft — the company actively building AI robots — ran a survey that found nearly half of workers are scared AI will take their job.

Well, I’m about to show you three ChatGPT prompts that prove them right.

Use them, and you might not need me anymore!

How to Set Up a Barefoot Buckets Plan in 10 Seconds

Let’s say someone earns $3,400 a month, pay $1,300 in rent, $400 on groceries, $170 on bills, and $280 on a car loan.

I typed this into ChatGPT: I want you to advise me on setting up my Barefoot Investor Buckets. I earn $3,400 a month. My regular expenses are: rent $1,300, groceries $400, bills $170, car loan $280. Can you help me divide my money into:

Blow (to live)

Mojo (to sleep at night)

Grow (to get ahead)

If I’m stuffing it up, give it to me straight, and give me advice on how to fix it.

Within 10 seconds it gave me a personalised breakdown — and this absolute pearler:

“Once the car loan is gone → funnel the full $680/month into long-term investments or house deposit savings.”

Then it followed up with three top-rated no-fee bank accounts that align with the Barefoot strategy (I checked — all legit). This thing doesn’t just talk in generalities. It gives specific, practical answers.

How to Save $600 a Month on Your Home Loan (in One Phone Call)

A friend told me she was on 6.2 per cent with a three-letter named bank. On a $600,000 loan, that’s over $37,000 a year in interest. Here’s what I had her plug into ChatGPT:

I’ve got a home loan of $600,000 with XXX BANK at 6.2 per cent.

Can you help me:

See if I’m getting a good deal

Find better options with lower interest rates and provide live links

Write a script I can use to negotiate with my bank

Finally, show me how much I’d save by switching, including your maths workings so I can check it.

It crunched the numbers for my friend, listed a bunch of different lenders offering lower rates, and handed her a negotiation script:

“I’ve been a loyal customer, but I’ve seen you’re offering better rates to new borrowers. Can we talk about matching those?”

Guess what?

She got off the phone with a better rate!

How to Build a $45,000 Nest Egg for Your Grandchild

Forget the piggy bank. Give your grandkids the magic of compound interest.

To get you started, type this prompt into ChatGPT:

Based on the principles in The Barefoot Investor, advise me on setting up a long-term investment account for my grandson. I want to invest $100/month until he’s 18.

Can you help me:

Choose a simple ETF or recommend a platform

Explain how to automate it

Show me what it might grow to at 8 per cent over 18 years

ChatGPT delivered a full plan — investment options, automation instructions, and a final figure: $45,000-plus.

It even suggested writing a letter to your grandkid explaining the gift. Brilliant.

Use It Like a Tool (But don’t be a tool)

Look, ChatGPT isn’t perfect. It can make mistakes. And it’s absolutely not a financial adviser.

Yet it’s fast. It’s specific. And it’s helpful. Think of it as a clever assistant that works 24/7, doesn’t take lunch breaks, and doesn’t try to sell you crypto.

And once you’ve tried it, you might not need me.

(Just don’t tell my kids.)

Tread Your Own Path!

P.S. Just to be clear: I wouldn’t outsource any major life decisions to a chatbot, and I strongly suggest you don’t either. I’ll say it again: do not trust this thing with your life savings. That’s like asking your air fryer to do your tax return. You’ll get cooked, and not in a good way!

AI lies and should not be relied on for financial advice.

A Simple Way to Repair Your Credit

Hi there,

I recently got knocked back for a credit card and found out there’s a black mark on my credit file from a telco bill I thought I’d paid years ago. It’s really stressing me out! Is it worth going to a credit repair company to get it off for a fee?

Renae

Hi Renae

Don’t you dare go anywhere near these scumbags.

I trust credit repair companies less than I would a labrador guarding a sausage.

Case in point: I once had a client who was knocked back for a loan because of some very old marks on her credit file that hadn’t dropped off for some reason. She went to a credit repair company and they charged her $458 a fortnight (via direct debit) and promised to “clean her credit file”.

And guess what happened next?

Not a hell of a lot.

By the time she made it to my desk, she’d paid the credit repair firm over $6000 … and there were still bad marks on her credit file, (yet they kept on assuring her they were making “good progress”).

With one phone call and a follow up email I was able to speak to the lender, argue her case, and get her credit file cleared.

Total time?

15 minutes.

Total cost?

Zero.

That’s what financial counsellors do, and we do this work for free. Call the National Debt Helpline 1 800 007 007.

Credit repair companies are best avoided.

Why Are You So Gloomy on AI?

Hi Scott,

Regarding last week’s column, I absolutely agree that we need to be cautious about the growing influence of AI in society. But I don’t think it’s all doom and gloom for the next generation. In fact, if used wisely, AI could help solve some of the biggest challenges we face, from healthcare and our ageing population, to climate change, education, and even geopolitics. Instead of just focusing on the negatives, maybe it’s also worth asking: In what ways could AI actually make life better for the next generation?

Lacey

Hey Lacey

I agree with you. One day, AI might help cure diseases, fix climate change, and even figure out how to get teenagers to stack the dishwasher properly.

Yet right now it’s mainly being used to flog fast fashion, spread lies, and feed teenagers (and their parents!) a never-ending stream of junk content designed to keep them scrolling instead of living.

Remember, the same companies that promised social media would “bring us together” have delivered record rates of anxiety, loneliness, and kids who’d rather text than talk.

Last week I said that I don’t believe that AI is inherently evil, rather that it is simply holding up a mirror to what is already happening. However, if we’re not careful, it won’t just mirror society, it’ll magnify our worst bits.

I’m not anti-AI. I’m pro-human. And I think we’ve got a narrow but golden window to raise kids who use tech with intention, not addiction. So yes, I’m hopeful. But I’m also a dad, and I can see that the iPad isn’t a babysitter anymore, increasingly it’s the boss.

It can be hard to stay on top of debt.

Teacher Getting Schooled

Hi Scott

A few years ago, my husband and I built up $60,000 in debt from our wedding, dental surgery, and a new car. We’ve brought it down to $57,000, but it still feels like a heavy weight on my shoulders. My husband is relaxed about the repayments. I’m not. I miss travelling, enjoying life, and feeling financially free. On top of that, we have a $428,000 mortgage.

When I realised how much we owed, I couldn’t sleep. So I did what I do best — I got to work. I now have four jobs. I teach full-time, park cars on weekends, do occasional demonstrator work, and manage a camp during school holidays. My goal is to pay off the $57,000 within 12 months so I can start my dream business. My question is: I’ve been putting my extra income into a Raiz investment account, but after reading about Capital Gains Tax, I’m wondering if it’s the right move.

Robyn (aka Tired Workaholic)

Hi Robyn,

You are a total weapon.

While most people in your situation would be doomscrolling Dogecoin and tossing up OnlyFans – but you’ve got four jobs. You’re parking cars, running camps, wrangling kids – and you’re still standing!

So here’s my advice:

Forget Raiz. Forget Capital Gains Tax.

You can’t invest your way out of personal debt. It’s like trying to fill a bathtub with a pasta strainer.

Besides, you already have the best “investment account” there is:

Your high-interest personal loan. Pay it off.

Your 12-month goal is bold, and I love it. Go all in. Every spare dollar, every car parked, every demo gig, whack it on the debt until it’s gone!

Oh, and one last thing. If your husband is chilling on the couch while you’re juggling four jobs — you’ve got a bigger problem than compound interest.

So sit him down, look him in the eye, and say: “we got into this together, and we’re going to get out of it together.” After all, this isn’t just about numbers. It’s about building a life together, and making sure you both show up for it.

You Got This!

DISCLAIMER: Information and opinions provided in this column are general in nature and have been prepared for educational purposes only. Always seek personal financial advice tailored to your specific needs before making financial and investment decisions.

Originally published as Barefoot Investor Scott Pape on AI chatbots, credit repair companies and paying down personal loans